Regulatory capital
A requirement imposed by regulation, usually on banks and like financial institutions to hold a certain amount of shareholder equity — called regulatgory capital — by reference to the assets and liabilities on their balance sheets. Hence the interest all such entities have in being as efficient as they can be in the usage of balance sheet.
See also
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Regulatory Capital Anatomy™
The JC’s untutored thoughts on how bank capital works. {{{2}}}
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